Bank of America to Charge $5 Month Fee for Using Debit Card
- Posted on September 29, 2011 at 9:16pm by
Tiffany Gabbay
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NEW YORK (The Blaze/AP) — Bank of America plans to start charging customers a $5 monthly fee for using their debit card to make purchases. The fee will be rolled out starting early next year.
A number of banks have already either rolled out or are testing such fees. But Bank of America’s announcement carries added weight because it is the largest U.S. bank by deposits.
Anne Pace, a Bank of America Corp. spokeswoman, said Thursday that customers will only be charged the fee if they use their debit cards for purchases in any given month. Customers won’t be charged if they only use their cards at an ATM.
The fee will apply to basic accounts and will be in addition to any existing monthly service fees. For example, one of the bank’s basic accounts charges a $12 monthly fee unless customers meet certain conditions, such as maintaining a minimum average balance of $1,500.
A fee for using debit cards is still a novel concept for many consumers and was unheard of before this year. But there are signs it may soon become an industry norm.
SunTrust, a regional bank based in Atlanta, began charging a $5 debit card fee on its basic checking accounts this summer. Regions Financial, which is based in Birmingham, Ala., plans to start charging a $4 fee next month.
Chase and Wells Fargo are also testing $3 monthly debit card fees in select markets. Neither bank has said when it will make a final decision on whether to roll out the fee more broadly.
The growing prevalence of the debit card fee is alarming for Josh Wood, a 32-year-old financial adviser in Amarillo, Texas.
Wood relies entirely on debit cards to avoid interest charges on a credit card. If his bank, Wells Fargo, began charging a debit card fee, he said he would take his business to a credit union.
If a debit fee became so prevalent that it was unavoidable, Wood said he‘s not sure how he’d react.
“I might use all cash. Or go back to writing checks,” he said.
The debit card fee isn’t the only unwelcome change for checking account customers are seeing either. The banking industry has been raising fees and scaling back on rewards programs as they adjust to new regulations that will limit traditional revenue sources.
Starting Oct. 1, a regulation will cap the fees that banks can collect from merchants whenever customers swipe their debit cards. Those fees generated $19 billion in revenue for banks in 2009, according to the Nilson Report, which tracks the payments industry.
There is no similar cap on the fees that banks can collect from merchants when customers use their credit cards, however. That means banks may increasingly encourage customers to reach for their credit cards, reversing a trend toward debit card usage in the past several years.
An increasing reliance on credit cards would be particularly beneficial for Bank of America, which is a major credit card issuer, notes Bart Narter, a banking analyst with Celent, a consulting firm.
“It’s become a more profitable business, at least in relation to debit cards,” Narter said.
This summer, an Associated Press-GfK poll found that two-thirds of consumers use debit cards more frequently than credit cards. But when asked how they would react if they were charged a $3 monthly debit card fee, 61 percent said they’d find another way to pay.
If the fee were $5, 66 percent said they would also change their payment method.
Bank of America’s debit card fee will be rolled out in stages starting with select states in early 2012. The company would not say which states would be affected first.
Bank of America shares rose 9 cents, or 1.5 percent, to $6.25 in afternoon trading.
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Comments (104)
TheePolitinator
Posted on September 29, 2011 at 11:25pmGuess what? I will NOT be keeping my account with them. Another example of in bed with Washington. It may be a 5$ fee but multiply that by everyone that uses a debit card….get the point?
Report Post »granolajohn
Posted on September 30, 2011 at 2:51amI know right?! This is why we need to get those out of washington that think that this fat cat corporations are people like you and I, and that they should continue to pay -1.5% tax rates! O wait thats the side this website supports… :]
Report Post »Ruler4You
Posted on September 30, 2011 at 3:43amWell, it might be better to CASH you account out every payday, paying one time, and use cash. An underground economy could surround such a movement in a short period of time.
Report Post »willbedone
Posted on September 30, 2011 at 8:01amYou beat me to the point. Banks have YOUR money on deposit and are making money on the interest. NOW they want to charge you for the privilege of holding your money. Must have liquid titanium instead of testosterone.
Report Post »RevoltInPeace
Posted on September 30, 2011 at 8:06amYou need to also realize that Congress recently passed laws (Durbin Act) that take away interchange income from banks to “help” consumers. This government intervention in the industry has radically impacted the economics of providing debit cards – banks no longer get the interchange income from the merchants like they used to do. Washington legislation always impacts the everyday people.
Report Post »hauschild
Posted on September 30, 2011 at 8:22amAnother unintended, liberal consequence of meddling with the private sector. But, the lemmings will continue to fault business instead of the government. Amazing, really.
Report Post »Fantastic Four
Posted on September 30, 2011 at 9:07ambuff-et wants to pay is 2 Billion tax bill on the backs of poor and middle class Americans, so much for FAIR SHARE…
Report Post »MidWestMom
Posted on September 30, 2011 at 9:39am@Ruler4You
That‘s what we’ve done for years. Hubby’s paycheck is direct deposited. On payday we pay house payment, utilities, car insurance with manual electronic payments. Then we withdraw the rest. We always pay cash for everything else. Debit cards & checks leave a trail so to speak and we don’t think its anybody elses business how or on what we spend our money. We keep $200 dollar balance for emergency use in the account. Everything else is out one way or another. Also, we’ve never signed up for any automatic withdrawl monthly payments. Don’t like anyone else having access to our bank account.
Report Post »theaveng
Posted on September 30, 2011 at 12:36pmIT‘S GOVERNMENT’S FAULT not the banks.
The government passed a low forcing banks to lower their “swiping” charge. That used to be paid by the store owners, but now it was lowed from average 90 cents to only 45 cents. This means the banks would be losing money (it costs more than 45 cents to process each transaction).
So rather than lose money (and go bankrupt) the banks are collecting the money elsewhere. THIS IS YOUR GOVERNMENT IN ACTION and causing unintended consequences that make it more difficult for the customer.
Report Post »p51d007
Posted on September 29, 2011 at 11:25pmLOL…it’s just going back to how it was. Before ATM’s, my bank charged 4 dollars a month for a checking account, then used the ATM as a “way to save money”, since the thing is an electronic funds transfer (etf). Now it’s just going back to how it was.
Report Post »If you don’t want the fee, and you are going to go shopping, just stop by the ATM, draw out the cash, and pay for your shopping in cash.
independentvoteril
Posted on September 29, 2011 at 11:40pmBOA started charging when my husband moved his savings to checking (he has that keep the change thing).. allowing him only 3 transactions a month.. however.. since he gets paid every 2 weeks on the non pay weeks he moved the money (usually) so he could get gas.. and on pay day he moved money into MY account..(yes we have separate accounts mine is for the house stuff).. so it was at least 4 transactions a month.. more on the months with 3 pay weeks..Now he goes and takes out CASH for me.. and WHY would I go all the way to the bank to put it back in for them to use until I need it?? so I just keep the cash and it spends really well.. He already heard about this fee and said he will be taking ALL his cash out and solve their bookkeeping problem..
Report Post »thekuligs
Posted on September 30, 2011 at 12:03amNo way am I carrying enough cash to do grocery shopping with in Las Vegas. I was almost mugged once before by two huge men in broad daylight. Luckily I had a huge knife. I used to pay cash for everything but it’s asking to have it taken from you here. I am 5′3 and often have 4 small children in toe I am to easy looking of a target.
My husband banked w/BOA for 10 years but we switched to USAA and they are amazing SO much better.
Report Post »M 4 Colt
Posted on September 30, 2011 at 4:42amThekuligs, you live in Nevada and that state offers its citizens CCW permits. I think you need to get one along with some range time, also some expert training to learn how and when to use it that way you will be able to protect yourself from thugs trying to steal your money.
Report Post »Ryan
Posted on September 30, 2011 at 9:33am@independentvoter – that’s a federal regulation… limiting saving to checking transfers.. it applies to all banks
Report Post »NDPINDNT
Posted on September 29, 2011 at 11:00pmThis may put me over the edge with this bank. I’ve just about had it with them anyway. Maybe I’ll just start writing checks. The card was suppose to reduce the number of workers processing checks. Maybe I’ll go back. humm…..or just dump them.
Report Post »OneFunR6
Posted on September 29, 2011 at 11:24pm“… or just dump them.”
+1!
Report Post »hopelodge
Posted on September 29, 2011 at 10:43pmjust so everyone knows regions bank is charging $4.00 a month to use their debit card, you also have to maintain deposits of $1500 per month. we just got news leter in mail, this if effective oct 1, 2011
Report Post »BeckJunkii
Posted on September 29, 2011 at 10:28pmAlthough banks are a “for profit” businesses, it’s a competitive market out there…community banks are where it’s at these days…I’ve had enough of the big box banks. There‘s nothing I can’t do at my community bank that I could do at BOA.
Report Post »Benbit
Posted on September 30, 2011 at 1:18pmJust so you know, BOA is the biggest bank for welfare debit cards and most don’t have checking.
Report Post »Maybe Obama will pickup the fee for them..he’s been trying to do in BAC.
pohknee
Posted on September 29, 2011 at 10:27pmPeople should remember that changing your card to another bank or credit union won’t seriously damage BOA or others. Removing all deposits in savings, CDs etc is what will gain their attention ie; close ALL accounts and move. Paying by Money Order may be viable.
Report Post »OneFunR6
Posted on September 29, 2011 at 11:26pmAgreed!
[see post above]
+1!
[by-by BofA!]
Report Post »reform
Posted on September 30, 2011 at 6:15amYou also have to remember they gave visa to who again? I guess they ran up the charges and went back home leaving us with the bill again huh? They soon will going after online bill paying watch.
Report Post »Archstone
Posted on September 29, 2011 at 10:21pmHEY! How about a toll booth at the entrance to the drive up teller windows? How about they
Report Post »don’t have pens laying around for you to use, they have a vending machine that sells pens and
deposit slips? OH! OH! How about parking meters in the parking lot? OH! How about they
change their bank phone numbers to 900-numbers? “Hey, baby, mmmm…. would you like
to make a deposit?” Seriously, anyone paying attention to BOA’s stock price should be moving
their money to another bank real soon anyway. They’re going under.
KEA
Posted on September 29, 2011 at 10:17pmTime to switch banks!
Report Post »WHA
Posted on September 29, 2011 at 10:24pmWhich one? Go ahead find one, I’ll wait…
Report Post »standswithafist
Posted on September 29, 2011 at 10:45pmyep, will be looking for a credit union next month.
Report Post »Fantastic Four
Posted on September 30, 2011 at 9:12amI love my credit union, no fees, free cashier checks and phone calls personally to me when activity doesnt make sense to them right away to verify. Also they don‘t let transactions passif your don’t have enough funds so yu wontget hit with big overdraft fees. I love my credit union. oops maybe I should keep quite so E. holder adn O’bama wont go after them
Report Post »powhatan
Posted on September 29, 2011 at 10:16pmThey will triple the cost of checks too, and probably charge for online banking as well…Then the post office will get REALLY slow….This all just sucks!
Report Post »powhatan
Posted on September 29, 2011 at 10:15pmAs always, the feds cause problems and they get passed on to us. I will change my bank to any bank that does not do this. Just because!
Report Post »banjarmon
Posted on September 29, 2011 at 10:14pmFree market…change banks like diapers
Report Post »Blazer123
Posted on September 29, 2011 at 10:28pmyes, but it’s the free market reacting to federal regulation. Change banks and blame Obama ;)
Report Post »M 4 Colt
Posted on September 30, 2011 at 4:47amYour right we have the Democrats to thank for this it’s called the Dodd Frank banking bill.
Report Post »reform
Posted on September 30, 2011 at 6:10amThanks for pointing that out m-4-colt ole them darn them r’s for passing this crap oh wait wrong party again my bad hehehehe. Thanks ole great one for giving them our money they needed so badly, to become one of the biggest banks. I guess they will be 2 big 2 fail right!!!!
Report Post »Snowleopard {gallery of cat folks}
Posted on September 29, 2011 at 10:10pmOnce more we see the results of the Fed’s meddling and scheming across the board; anyone want to speculate about how soon until another round of “fee control” bills commenses, putting more and more restrictions on the banks until finally the entire industry of banking collapses into Fed controlled arms?
Report Post »Dougral Supports Israel
Posted on September 29, 2011 at 10:10pmI figure this will spread to all banks soon. Like with any other consumer transaction I will be looking for the cheapest way to operate. I don’t carry a monthly balance on credit cards so using one of those is essentially free. I can always use cash or write a check also.
Report Post »oldironsides
Posted on September 29, 2011 at 10:07pmthis will be interesting – my business checking w/ BofA waives monthly fee if I use debit card at least once a month. Now they will charge me to use it???? We’ll see how it goes, but I’m willing to change banks.
Report Post »Theleftisda
Posted on September 29, 2011 at 10:49pmIt won’t affect you or me I have a business account also and talked to them today and those accounts will not be part of the program and my personal account is paper less and will not be affected.
Report Post »Bekrhed
Posted on September 29, 2011 at 10:05pmIn 2010, the bank was accused by the US federal government of defrauding schools, hospitals, and dozens of state and local government organizations via misconduct and illegal activities involving the investment of proceeds from municipal bond sales. As a result, the bank agreed to pay $137.7 million, including $25 million to the Internal Revenue service and $4.5 million to state attorneys general, and to the affected organizations to settle the allegations.
Report Post »—so they defraud schools, hospitals etc etc and now we have to reimburse them for their crimes.
We really do live in a Kleptocracy.
RightPolitically
Posted on September 29, 2011 at 9:56pmThese damn banks should have been allowed to sink back in 2008. They wheeled and dealed in corrupt mortgages for years, urged on by Fanny and Freddy, got bailed out by “schmo” taxpayer and now this. Gotta luv the balls on these SOBs.
When debit cards and ATMs first came on the scene, banks saved millions in manpower expenses right from the start. Besides, they were making fees up the ying yang everytime a customer stuck his card into one of their machines. I hope the next administration will let them fail, go out of business, and where appropriate, sent some of the executives to jail, long term. But I will not hold my breath.
Report Post »Zcat
Posted on September 29, 2011 at 9:52pmSo is Well Fargo and Sun Trust they’ve all done this! I said this would happen when Obama wall street reform scam was passed!
Report Post »randy
Posted on September 29, 2011 at 9:40pmPrivate company can do whatever they wish, you don’t like it, move to another bank.
Report Post »And when enough people move on, and they lose enough money, just maybe they will reconsider.
Isn’t the free market wonderful? :)
cetruax
Posted on September 29, 2011 at 9:40pmThere will no doubt be some banks, probably the smaller ones, which will NOT charge these fees in an attempt to gain an advantage over the others…. They deserve the business. If the big banks loose enough business they’ll find they are not gaining anything by charging higher fees.
Report Post »majorsco
Posted on September 29, 2011 at 9:39pmThat is an incentive to switch banks! Debit card purchases are a convenience and this fee is a punitive fee.
Report Post »dealer@678
Posted on September 29, 2011 at 9:47pmOff topic. I live in Dallas Tx. and if Perry is elected this country will be infested with illegals . Every city in Texas is a sanctuary city and with that comes a massive population explosion with their breeding habits. Thats the truth
Report Post »Captain Crunch
Posted on September 29, 2011 at 9:37pmIt’s too inconvient for me to switch banks. PNC Bank (Previously National City Bank) has never charged for their debit card usage. Its such a valuable service for people who do a lot of traveling (me) it’s worth $5/mo. My opinion.
Report Post »lodgerat
Posted on September 29, 2011 at 9:34pmI will look for a new bank tomorrow
Report Post »kickagrandma
Posted on September 29, 2011 at 9:23pmOne of the myriad of reasons ba is NOT our bank.
Report Post »YammusBaggus
Posted on September 29, 2011 at 9:22pmSounds fair to me. I’m glad about this
Report Post »TheePolitinator
Posted on September 29, 2011 at 11:27pmsounds fair? a service provided by a micro chip with zero overhead sounds fair? you must be a liberal
Report Post »Evil Bert
Posted on October 1, 2011 at 9:11am@ THEEPOLITINATOR
If you think any business has no overhead you are the liberal my friend. There is all kinds of overhead at a bank. I design computer systems for a bank and it is extremely expensive to buy servers from companies like HP and IBM that cost more than than most houses in the U.S. A typical P-series AIX server from IBM costs nearly $500,000. Other serves can cost anywhere from $4000 – $60,000. Those servers are used to process your debit card, credit card, auto loan, home loan, or just about anything else you do with a bank.
You want to pay your bills online, there are computers that have to support that as well as staff that have to support it so it stays up running and is there for YOU to use when YOU wish to use it. That all costs money. The customer pays for that service or feature.
The guy that has a lawn cutting business charges his fees based on fuel and maintenance, salaries, etc – you as the business or homeowner pay those costs for the service.
Lest you never forget – the consumer pays for EVERYTHING. The consumer pays corporate taxes, overhead, everything and everything. So when you or anyone else espouse “tax the bastard corporations” or business, think first who those fees/taxes will get passed onto. You and I.
It saddens me to see all these people who read the blaze and pretend to be conservative – read the headline only and neglect to realize it is a fee in response to laws passed by those fools on the Hill. WAKE UP
Report Post »whatthecrazy
Posted on September 29, 2011 at 9:22pmGlad i dont use one
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